Audit discloses mismanagement, theft in two DHHS programs (AUDIO)

A state audit discloses hundreds of thousands of dollars intended for vulnerable Nebraskans has been mishandled by the Department of Health and Human Services, including a criminal charge filed against a woman appointed as a legal guardian over 600 people.

State Auditor Mike Foley revealed the contents of the audit during a news conference in his Capitol office Monday.

The audit reviewed two programs run by DHHS: Assistance to the Aged, Blind, or Disabled and the State Disability Program.

The programs serve roughly 6,000 elderly, blind or disabled Nebraskans who can no longer manage their own affairs. The two programs handle nearly $15 million in state tax dollars annually.

Foley said his staff auditors found that in slightly more than a third of the cases, DHHS made cash payments for basic living expenses or medical payments “that were unreasonable or in direct violation of state law or regulations.”

Foley contended DHHS ignored several red flags that could have stopped Judith Widener of Scottsbluff from allegedly stealing hundreds of thousands of dollars from the 600 persons she served as legal guardian.

“First of all, why would one person have so many wards of the state? That would be a key red flag right there. That’s what we viewed as a red flag, instantly, as we got into this audit. That’s just one major red flag. Why would somebody have hundreds of persons as wards under her guardianship?” Foley asked.

According to the auditor’s office, “Widener masked her alleged embezzlement through a complex array of credit cards and over 40 bank accounts containing more than $600,000.”

The Scottsbluff Star-Herald reports Widener, who is 70, was formally charged Monday with theft by taking, a felony. Widener ran Safe Haven Inc., a company claiming to be an online debt and credit counseling firm. The company handled accounts of persons appointed legal guardians to handle the financial affairs of the elderly or disabled

The charges were filed after the Nebraska State Patrol arrested Widener on Friday.

Foley said neglect by the DHHS led to problems with Widener. A number of improprieties should have tipped off the department to the problem.

“So, it was all right there for anyone to see if they wanted to take the time to explore this.”

Foley said there is no excuse for DHHS not to have uncovered the alleged criminal activity.

“It would be a very easy record to check, but you have to take the time to do it,” Foley said. “There’s just an element of sloppiness here and lack of training, lack of oversight, very, very poor accounting controls and when you have that kind of an environment, some mistakes are going to slip right through the cracks and it opens the door and it creates an environment that’s just ripe for embezzlement.”

The audit cited three incidents in which more than $100,000 was improperly appropriated, because eligibility was not ascertained.